Oscar Health’s Earnings Call: Growth Amid Challenges

Oscar Health, Inc. ((OSCR)) has held its Q3 earnings call. Read on for the main highlights of the call.

Oscar Health’s recent earnings call presented a mixed sentiment, reflecting both optimism and challenges. While the company showcased impressive revenue growth and a substantial increase in membership, it continues to grapple with issues such as a rising medical loss ratio and operational losses. The introduction of innovative products and AI integration suggests promising future potential, yet current financial metrics reveal significant hurdles that need to be addressed.

Revenue Growth

Oscar Health reported a total revenue of approximately $3 billion for the third quarter, marking a 23% increase year-over-year. This substantial growth underscores the company’s ability to expand its financial base, a positive indicator for investors looking for robust revenue streams in the healthcare sector.

Membership Increase

The company ended the first nine months of 2025 with over 2 million members, representing a 28% increase compared to the previous year. This growth in membership highlights Oscar Health’s expanding reach and appeal in the health insurance market, signaling strong consumer trust and market penetration.

SG&A Expense Ratio Improvement

Oscar Health achieved an improvement in its SG&A expense ratio by approximately 150 basis points year-over-year, bringing it down to 17.5%. This reduction indicates better operational efficiency and cost management, which are crucial for enhancing profitability.

Market Expansion

The company is expanding its market presence into 20 states, including new entries into Alabama and Mississippi, as well as planning new market entries for 2026. This strategic expansion is expected to drive further growth and diversify Oscar Health’s market footprint.

Innovative Products and AI Integration

Oscar Health introduced new products like HelloMeno and is integrating AI with Oswell, powered by OpenAI, to enhance member experience. These innovations reflect the company’s commitment to leveraging technology to improve healthcare delivery and customer satisfaction.

Medical Loss Ratio Increase

The medical loss ratio increased by approximately 380 basis points to 88.5%, attributed to higher market morbidity. This rise poses a challenge as it impacts the company’s profitability and requires strategic management to mitigate its effects.

Operational and Net Losses

Oscar Health reported a $129 million loss from operations and an adjusted EBITDA loss of $101 million, with a net loss of $137 million for the third quarter. These figures highlight the financial challenges the company faces, necessitating effective strategies to curb losses.

Risk Adjustment Payable Increase

The third quarter’s medical loss ratio was affected by a $130 million increase in the risk adjustment payable for 2025. This adjustment reflects the complexities of managing financial liabilities in a dynamic market environment.

Program Integrity Challenges

Oscar anticipates market contraction due to the expiration of enhanced premium tax credits and program integrity efforts. These challenges underscore the need for adaptive strategies to navigate regulatory and market changes.

Forward-Looking Guidance

In its forward-looking guidance, Oscar Health highlighted a 23% increase in total revenue and an increase in the medical loss ratio by 380 basis points. The company expects a weighted average rate increase of approximately 28% for 2026, driven by elevated market morbidity and strategic pricing. Oscar reaffirmed its full-year guidance, projecting total revenue towards the lower end of the $12 billion to $12.2 billion range, with a full-year MLR between 86.0% and 87.0%. The company remains optimistic about expanding margins and returning to profitability by 2026 through disciplined pricing and cost management.

In summary, Oscar Health’s earnings call reflects a balanced outlook with significant growth in revenue and membership, juxtaposed with financial challenges such as increased medical loss ratios and operational losses. The company’s strategic focus on market expansion, innovative products, and AI integration offers a promising path forward, though careful management of current financial hurdles will be crucial for future success.